Secret Network - Discussion for Tokenomics Proposal

Secret Governance
17

Comments topic topic:

  1. Validator stipend
  • I agree with this concept and think its a good match for secret. Especially if the set also decreases slightly to maybe ~60 validators.
  • I am missing the impact here that will improve decentralisation but we had this conversation many times and i am not sure the community will agree on any practice here
  • I would not anchor the stipend at a monthly usd amount but at a monthly SCRT amount. Validators are fine with some risk but added upside, they dont need usd based compensation but just a long term believe that at some point the upside will recoup their cost. I think its best if the community agrees to an inflation % split that would be specific for validators and simply adjust that value to the downside if SCRT price goes up far beyond current value.
  1. Liquidity fund:
  • Setting up a new fund sounds like a lot of tech debt/work for no real benefit, id advocate for just signalling that a % of the community pool is to be used for this and create a regular spend proposal that fills up the coffers of whatever subDao manages the liquidity.
  • i do agree that Secrets community pool should become more active in Defi though, especially when constellation chains also goes live and those tokens come to the community pool. Id advocate for a higher overall tax on stakers if a majority of those funds go to this liquidity fund
  1. SNF
  • I dont think we can clean the community pool at this moment in time, i cant support this part of the proposal. I do like the USD matching idea where community and SCRT labs contribute together but am not sure its reasonable to expect this from SCRT labs.
  1. community pool
  • Yes, community shouldnt do too many spend proposals especially not for technical projects - its not governable and has proven unsuccesful in the past.

Besides these comments i also made some comments during the past tokenomics call which i will list here. Overall they all are in line with me wanting the network to take more actions towards truly sustainable tokenomics. With CCL heating up and Blockspace on Secret being rather sparse and marketcap fairly low i think there is a real oppurtunity to start making atleast some network revenue that can start compensating stakers and validators over inflation. With this the intention shouldnt be to over-charge users for a product that isnt complete or awesome yet, but it is to get the tools in place to be able to do so when the time comes.

Some of the ideas are:

  1. Taking fees from SecretPath (now Alex, the relayer, basically pays it)
  2. Taking fees on IBC to some capacity if needed - if many SNIPS become successful then secret can charge for exporting tokens throughout the interchain - it also directs revenue from products like SilentSwap to the Secret L1
  3. Taking fees on SecretVRF itself on the chain level to compete with chainlink volumeMEV - Right now people could fork SecretPath/evmVRF and remove the fees, this should be combatted against on a network level long term.
  4. Adding MEV implementations through Skip-tenderming that Auction the block creation or certain block positions to MEV searchers. As secret is encrypted by default it can label the total value on a block to be made on MEV without revealing contents and also while prohibiting Sandwich attacks. Including such an MEV engine inside the network can be a longterm driver of revenue for stakers and validators like it has become on Osmosis, Solana and Ethereum.
  5. Skip Block SDK with wip1559 style gas markets - this will make it so CCL starts to be priced and demand for SCRT exists. it is important this is tied in with Osmosis style fee abstraction so that CCL can be priced in any asset Shade supports. People will be able to build metamask or even walletless apps on Secret that charge the user only in USDC - this should be a tokenomics goal as this USDC becomes direct market buying pressure on the SCRT shade pool. The block sdk also should keep separate lanes for IBC messages so to prevent issues where CW based txs overflow other users on the network
  6. Inflation intended for Defi incentives Berachain or Terra Alliance style Or even to a community LP fund - this is in line with what orageux mentioned but basically means the community can decide to send part of the SCRT inflation to smart contracts like the SCRT/USDC liquidity pool on shade. This type of direct impact on on-chain defi activity would be an exciting mechanism for community members and a helpful tool to onboard more dApps. Alliance is very easy to implement (its a segregated module) and i would highly advocate for it (definitely call it something else though).

Thats the first comments on the proposal - now its time to read the other 12 replies.

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